Out of the blue my car started to make a bad thunking noise as I accelerated.

Thought it was loose lug nuts but they were all tight.

Got it home and put it up on jackstands, put it in drive and the noise seemed to be coming from the transfer case. with all 4 tires off the ground I figured the rear tires would turn but the drive shaft wouldn't move. It seemed like it was trying to catch and turn the shaft but it wasn't happening.

I removed a 13mm bolt on the side of the case. No fluid dripped out. I put a slightly curved wire about an inch in and down the hole and it had fluid on in. This leads me to believe the fluid is just below the threads of the hole. Fluid has a strong odor (not quite how burnt atf smells) but I know this is a different kind of fluid and prob. smells different when it's broken down. the car has 127k miles on it and I doubt the transf case (or tranny) fluids have ever been changed.

I drained Rear diff. Fluid, level was normal, color was dirty but not dark. Refilled.
Fluid in the transfer case was Black and smell was quite strong. refilled with versatrak.

I don't really have a trusted shop to take it to to diagnose, if I can get a handle of the problem 1st, then I feel like I can start asking around on who to trust for a specific fix. My not make sense but I am weird and want to know that this is something I can't fix myself before I bring it to the shop. Getting to that point though and will prob. be bringing it in somewhere soon. as of now its not banging anymore but there is a steady grind.

Pulled the Driveshaft, grinding sound still coming from the transfercase/tranny. I had my suspicions but needed to narrow it down.
Here is a video on what it is doing w/o the driveshaft.https://www.youtube.com/watch?v=TOrH...L&index=2&t=2s
Time to take it to the shop and see if it's worth keeping/fixing.